The dollar and sales volumes of international real estate transactions in the U.S. declined from April 2020 through March 2021. Foreign buyers purchased $54.4 billion worth of U.S. homes during this period, a 27 percent decrease from the previous 12-month period. They purchased 107,000 properties, down 31 percent from the prior year. The dollar and sales volumes are the lowest since 2011, when those figures were $66.4 billion and 210,800 properties, respectively.
"It declined and that should be no surprise given the pandemic, travel restrictions and enhanced by the decline the past year," said NAR Senior vice president and chief economist Lawrence Yun, who presented the "International Transactions in U.S. Residential Real Estate" report at the National Association of Realtors Global Real Estate Summit held virtually on July 26.
Yun is hopeful. "Now the vaccination is being rolled out, there's still a great deal of international restrictions, but perhaps there will be some degree of some passport acceptance based upon the vaccination status and let's just hope that the virus situation steadily diminishes over time so we can get back to more normal functioning life."
Few countries came out positive economically in 2020 overall, said Yun. China had a major shutdown at the beginning of the pandemic, then re-opened and its economy surged toward the end of the year. The U.S. experienced the same. Yun said 2020 officially was the shortest recession, but the depth of it was quite steep, so it is going to take some time before things get back to normal.
Based on transactions from April 2020 ending March in 2021, foreign buyers living in the U.S. as recent immigrants or holding visas that allowed them to live in the country purchased $32.4 billion worth of U.S. homes, representing 60 percent of the dollar volume of home purchases. Foreign buyers from abroad purchased $22 billion worth of homes, accounting for 40 percent of the dollar volume.
China and Canada continued past years' trend of ranking first and second in U.S. residential sales dollar volume at $4.5 billion and $4.2 billion respectively, followed by India ($3.1 billion), Mexico ($2.9 billion), and the United Kingdom ($2.7 billion).
Florida remained the top destination for foreign buyers, accounting for 21 percent of all international purchases. California ranked second (16%), followed by Texas (9%) and Arizona (5%), with New Jersey and New York tied at 4 percent.
The median sales price among international buyers was $351,800, 15 percent more than the $305,500 median for all homes sold in the U.S. At $476,500, Chinese buyers from the mainland, Taiwan, and Hongkong had the highest median purchase price, and more than a third - 34 percent purchased property in California. This is not surprising given the large Asian population in the state and its proximity to China.
Yun said generally foreign buyer purchase more expensive homes than U.S. buyers, and most pay all cash. This year more foreign buyers living in the U.S. have turned to financing because of the low mortgage rates.
The percentage of U.S. clients looking to buy property abroad also fell during this period, down 8 percent from 11 percent. Top countries of interest were Mexico, Canada, China, Costa Rica, Dominican Republic, Spain and Argentina.
Yun said the IMF anticipates an economic recovery in 2022. In the US, more homebuilding is expected to take place, which means more inventory choices. It will be another superheated market with about a 3 percent price appreciation.
"We hope that price appreciation matches people's income growth," said Yun. "Right now, the dollar has been slightly weakening recently and maybe this is an attractive draw for many foreigners who want to buy here in the U.S."
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